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November 30, 2023

Sonowal: VGF for shipbuilding soon

According to Union Minister for Ports, Shipping, and Waterways Sarbananda Sonowal, the government intends to provide viability-gap funding (VGF) to lower capital costs for shipbuilding projects. According to Sonowal in an interview, the government also intends to expand the network of inland waterways, build mega seaports, and create a trans-shipment hub in Greater Nicobar. He mentioned the government’s plans to build three mega ports.
Sagarmala and the Maritime India Vision 2030 were two highly significant initiatives that the government immediately implemented after taking office. India will now experience faster economic growth thanks to these two forward-thinking programmes, which will enable us to expand and modernise our port infrastructure, offer connectivity through ports, carry out industrialization through ports, foster coastal communities and shipping, and capitalise on a vast network of inland waterways.

Sonowal said, “Our ports were able to handle close to 800 million tonnes of cargo annually in 2014. It has increased to 1.6 billion tonnes in only eight years. The rate of growth illustrates how modernisation programmes are beneficial. Additionally, the turnaround period at ports for our container ships used to be 44 hours. There are now only 26 hours left. Port infrastructures are incorporating mechanisation, upgrading, and digitization. The turnaround time is currently around 22–23 hours, or less than a day, and we’re working to reduce it. In order to make operations systems more competitive globally, to accommodate large vessels, and to reduce turnaround times so that they may operate more profitably, we also want to develop unmanned technology.” He added that 2035 is the target year for the Sagarmala program’s project completion. It aims to cut Exim and domestic freight logistics expenses, resulting in annual cost reductions of between 35 and 40 billion rupees. Additionally, Sagarmala hopes to cut 12.5 mt/year of carbon emissions from the transportation sector. Out of the total 802 projects we’ve selected for the programme, the majority have already been finished, others are being implemented, and some are still in the planning stages. Additionally, MoPSW have integrated coastal district development under it. At the most recent meeting of the top body, 567 additional projects with an estimated investment of 56,000 crore were added in this regard. This will take up overall investment under the programme beyond 5.5 trillion.

The nation’s inland canal networks’ cargo handling capacity was barely 16 mtpa up to 2014, but it is now 109 mtpa. That is the transformation that the Jalmarg Vikas Project at the Ganga and National Waterways 1 and 2 on the Brahmaputra have brought about. There were only four national waterways as of 2014; there are currently 23.
The inability of ships to navigate the system of waterways continues to be a significant issue.

The largest warship ever built in India, the INS Vikrant, was constructed by Cochin Shipyard Ltd., a global pioneer in ship construction. It is able to produce the necessary ships. Additionally, it will produce electric catamarans, mostly for interior waters. It will be pollution free and help meet net-zero emission targets.

When asked that How will MoPSW will support the shipbuilding industry? Is a VGF plan being considered?

Sonowal said, “We have plans (a VGF scheme). We will need to pursue these kind of legislative incentives if we want to motivate our investors in this industry. Because we are engaging private companies in Sagarmala as well, it would be conducted in PPP mode. More than $24,000 crore has thus far come from private business owners for Sagarmala. So, in addition to developing the port, our policy also focuses on how to advance shipbuilding in the nation.”

In regards to other shipbuilding projects, it wa reported that the Cochin Shipyard’s Hooghly division has begun operations. It is specifically designed for inland cargo ships, and 8–10 of them will be produced annually. For low-draft vessels, we have taken technical support from DST in Germany. It has a 180 crore investment. In Pandu, Guwahati, we’ll also build a ship-repairing plant.

Sonowal added, “Additionally, we signed a memorandum of understanding with IHC Netherlands that will enable Cochin Shipyard to produce substantial 12,000 cu m dredgers. This will be the first time an enormous dredger is produced in India.”

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